Kodak Pivots Toward Blockchain Technology

On January 9, 2018, Kodak and WENN Digital, in a licensing
partnership, announced the launch
of the KODAKOne image
rights management platform and KODAKCoin, a photo-centric cryptocurrency that will
empower photographers and agencies to take greater control in image rights management.

The announcement immediately boosted Kodak’s
stock, which is now trading at more than twice its previous value.

The idea is that the KODAKOne platform, based on
distributed ledger technology (DLT), “will create an encrypted, digital ledger
of rights ownership for photographers to register both new and archive work
that they can then license within the platform.” KODAKCoin, the native
cryptocurrency of the new platform, will allow participating photographers to “receive
payment for licensing their work immediately upon sale,” on a secure blockchain
platform.

Redefining
the “Kodak Moment”

Kodak has been one of the biggest names in photography for
decades. The expression “Kodak moment,” popularized
in 2013, was used to indicate charming moments worthy of capturing in a
photograph. But recently, the expression also has taken on another, less-charming
meaning.

As blogger Dick Taylor wrote in
August 2017, the new definition of a “Kodak moment,” could be a “situation in
which a business fails to foresee changes within its industry and drops from a
market-dominant position to being a minor player or worse, declares bankruptcy.”

Many experts believe that Kodak was too slow in transitioning from
film to digital photography. As a result, the company was forced to file for
Chapter 11 bankruptcy protection:

“We grew up with Kodak being one of
the mainstay brands of the world,” noted Peter Diamandis, co-founder and
chairman of Singularity University (SU), in a video for the
World Economic Forum. “In 1996, Kodak was at the top of their game. It was a $28
billion company with 140,000 employees that, 20 years earlier, had invented the
digital camera but failed to see the potential of it. In 2012, Kodak declares
bankruptcy, effectively disrupted by the very technology that they had
invented. They didn’t understand what exponential growth would look like.”

Kodak then abandoned its unprofitable legacy business lines and
eventually exited from bankruptcy in 2013. The move toward the DLT space
indicates the company intends to learn from its past mistakes and heed
Diamandis’ advice. Companies in all business sectors are adopting DLT to
streamline their existing business lines or pursue new ones, and Kodak’s
initiative in creating a blockchain-powered digital rights market for
photographers, both professionals and amateurs, makes a lot of sense.

The New
Picture

A Kodak press release states
that the KODAKOne platform will automatically monitor the web to search for and
protect the unlicensed use of images registered on the platform. Kodak hasn’t
released detailed technical information, but Etherworld and other news
outlets reported that the
KODAKOne blockchain will be based on Ethereum and use Ethereum’s smart
contracts, at least initially: “We are using Ethereum Smart Contracts, but
we’re also developing our own proprietary blockchain and will evaluate the
optimal solution during development,” a Kodak spokesman stated.

According to Ars Technica, KODAKCoin may be a
rebranding of RYDE, a discontinued cryptocurrency developed by WENN Digital.

“For many in the tech industry, ‘blockchain’ and ‘cryptocurrency’
are hot buzzwords, but for photographers who’ve long struggled to assert
control over their work and how it’s used, these buzzwords are the keys to
solving what felt like an unsolvable problem,” said Kodak CEO Jeff Clarke. “Kodak
has always sought to democratize photography and make licensing fair to
artists. These technologies give the photography community an innovative and
easy way to do just that.”

WENN Digital, a development team associated with the Deloitte
Analytics Institute in Berlin and the Deloitte Blockchain Institute in Munich,
will utilize its experience in blockchain development to participate in the
development and deployment of the KODAKOne platform and the KODAKCoin
cryptocurrency.

“Engaging with a new platform, it is critical photographers know
their work and their income is handled securely and with trust, which is
exactly what we did with KODAKCoin,” said WENN Digital CEO Jan Denecke, in the
press release. “Subject to the highest standards of compliance, KODAKCoin is
all about paying photographers fairly and giving them an opportunity to get in
on the ground floor of a new economy tailored for them, with secure asset
rights management built right in.”

The official KODAKCoin website was
not functional as of January 17, 2018. A KODAKCoin initial coin offering will
begin, according to Kodak, “on January 31, 2018, and is open
to accredited investors from the U.S., U.K., Canada and other select countries.”